Pennsylvania Enacts Law Banning Certain Non-Compete Agreements with Healthcare Providers
On July 23, 2024, Pennsylvania Governor Josh Shapiro signed the Fair Contracting for Health Care Practitioners Act (the “Act”), which bans certain noncompete covenants, including patient nonsolicitation provisions, between an employer and health care practitioner if the covenant is more than one year or the health care practitioner was “dismissed by the employer.” The effective date of the Act is January 1, 2025. The Act’s Key Provisions The Act renders void and unenforceable any covenant between an employer and health care practitioner “which has the effect of impeding the ability of the health care practitioner to continue treating patients or accepting new patients.” The Act, however, includes a key exception: it permits covenants that are no more than one year and where the health care practitioner was “not dismissed by the employer.” Therefore, covenants will remain enforceable if (1) the covenant lasts no more than one year and (2) the health care practitioner...